Plain English Meaning
A check, required every two years, that confirms the aircraft's transponder is working correctly and reporting the right altitude to air traffic control.
Full Definition
A regulatory inspection and test of an aircraft's ATC transponder and altitude reporting system, required under 14 CFR 91.413 within the preceding 24 calendar months for any aircraft operated with a transponder. The inspection verifies that the transponder transmits correct identification and altitude data and meets the performance standards specified in 14 CFR Part 43, Appendix F.